Tariff/Trade War Affecting Canadian Small Businesses in 2025

As of March 2025, the tariff landscape has shifted for Canadian small businesses. The United States has implemented a 25% tariff on Canadian imports (excepting oil and gas which has a 10% tariff), and Canada has responded with a 25% tariff on a selection of U.S. goods. Even more tariffs are set to come into effect in the first week of April. This back-and-forth, driven by the American government’s trade policies, is now part of the reality we’re all navigating. What this means for Canadian small businesses is adjusting to new challenges around costs, supply chains, and customer dynamics. Here’s a look at what’s happening and how you can respond.

Higher Costs Are in Play

With the tariffs now active, importing from the U.S. comes with a 25% upcharge. If your business relies on American supplies—like a craft shop buying yarn or a builder sourcing tools—your expenses have likely ticked up. Exporting south? Your goods now cost U.S. buyers 25% more, which could soften demand. For small businesses, these changes might trim your margins, but there’s room to adapt without overhauling everything.

Supply Chain Adjustments

The border isn’t shut, but it’s a bit stickier. The 25% tariffs on both sides have slowed some shipments, with customs processing taking a little longer. If you’re a retailer bringing in U.S. inventory or a manufacturer shipping to American clients, you might notice delays or shifting order patterns. Given that 75% of Canada’s exports head to the U.S., it’s worth keeping an eye on how this evolves.

Customer Impacts

On the home front, Canadian shoppers will start to see higher prices for U.S.-made goods, from groceries to gadgets. This could nudge them to spend less on extras, possibly affecting your sales. In the U.S., some customers might opt for cheaper, tariff-free options over your exports.

Steps to Stay Steady

There’s no need to panic—small tweaks can go a long way. Check your supply chain: could local or non-U.S. sources work? Shore up your cash flow by trimming minor costs, giving you a cushion. Government programs, like the Canada Small Business Financing Program, might offer support if the tariffs linger. Your accountant can help too, running the numbers to adjust pricing or find tax efficiencies.

For more information, check these out: 

• Article on the new tariffs

• Article on the April tariffs

• List of Canadian exports that will have a 25% tariff on them

• Video looking at tariffs

At Shaw & Associates, we’re here to help you navigate this new tariff reality. Reach out when you’re ready—smart planning today keeps your business solid tomorrow.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.